Media Coverage

What factors contribute to poor people in developing countries lifting themselves out of poverty? A forthcoming paper by economists Anan Pawasutipaisit of Thammasat University and Robert M. Townsend of MIT provides important insights into what kinds of households might be most effective at moving themselves out of poverty and how they are able do it. Their paper, which is due to be published in the peer-reviewed Journal of Econometrics, suggests that poor people who skillfully manage their assets are especially successful in improving their net worth. The authors discovered that the ability of poor families to increase their wealth was strongly related with their rate of saving and, even more so, with their ability to create a high return on assets.

"We actually are the ones being trained by the successful individuals who are out there -- we learn from them, from what they do, and how they overcome obstacles." That is the modest analysis offered by Professor Robert M. Townsend of the ambitious program over which he is presiding, funded by a $3.3 million Templeton grant, "Discovering the Power of Free Enterprise to Create Wealth and Alleviate Poverty Through a New Applied General Equilibrium Enterprise. The shorthand name for the project is "The Enterprise Initiative" and it is a collaborative effort between senior researchers at three major institutions: the University of Chicago, the Poverty Action Lab at the Massachusetts Institute of Technology, and the Economic Growth Center at Yale University.

The most comprehensive set of data gathered on Thailand's developing economy is now available free online. The Townsend Thai Data, which economist Robert M. Townsend and his colleagues gathered, is available at http://dvn.iq.harvard.edu/dvn/dv/rtownsend. The site includes 10 years of consecutive data, which will be updated with new information as it becomes available. The resource gives users not only a snapshot of economic life at a particular time, but a constantly evolving portrait of Thailand's economy at different levels.

Templeton Foundation funds major study of entrepreneurship in developing world.

The John Templeton Foundation has provided a $3.3 million grant for a new project to focus on wealth creation and poverty reduction in developing countries by bringing together some of the nation’s leading economists and scholars to form The Enterprise Initiative, based at the University of Chicago. University scholars will join researchers at the Massachusetts Institute of Technology’s Poverty Action Lab and Yale’s Economic Growth Center.

The Thai Family Research Project is a ten-year longitudinal study begun in 1997 by Robert M. Townsend. With a group of Thai collaborators, Townsend has compiled a comprehensive database, documenting how rural people in the rapidly developing country are, for example, borrowing money to invest in new farm equipment or purchasing vehicles to begin trucking businesses. The aim—as the title of his forthcoming book, Financial Systems in Developing Economies; Growth, Inequality, and Policy Evaluation in Thailand (Oxford University Press), makes clear—is to help researchers and policy-makers guide emerging nations into the global economy.